Two South Koreans arrested for alleged price manipulation on Bithumb

Two South Korean men have been implicated in a case of price manipulation on the crypto exchange Bithumb. The two men allegedly gained nearly $5 million from manipulating the price of the Fusionist token, ACE.

According to a Jan. 3 report on local news media Digital Asset, the Seoul Southern District Prosecutors’ Office’s Virtual Asset Joint Investigation Team arrested 33-year-old CEO of virtual asset operator M, Lee, alongside a former employee of M, Kang, for alleged market manipulation on Bithumb.

The pair were charged with price manipulation and violating the South Korean Virtual Asset User Protection Act.

Based on the police investigation conducted by Chief Park Geon-wook, the pair manipulated the price of blockchain-based gaming project Fusionist’s native token, ACE. In South Korea, Bithumb is the only crypto exchange known to list ACE for market trading.

This is the first case that the South Korean Financial Services Commission immediately categorized as a top priority, placing it on the “Fast Track” for processing since Oct. 25, 2024, for alleged violations of the Virtual Asset User Protection Act.

According to the press release, Lee and Kang allegedly sold around 1.22 million ACE tokens and made a profit amounting to 7.1 billion won ($4.8 million) by submitting fake buy and sell orders to inflate the ACE price.

On July 22, 2024, the prosecutor’s office noted that Fusionist token’s trading volume increased by nearly 15 times in a single day to about 2.45 million. This kind of suspicious trading activity tipped off authorities to the scheme happening behind the scenes.

At the time of writing, ACE has dipped slightly by 0.3% in the past 24 hours, according to CoinGecko. In the past week, the token has gone up by 1.1%. However, over the past year, the Fusionist token has fallen by nearly 75%. ACE has a market cap of around $92 million and a fully diluted valuation of $319 million.

Globally, ACE’s trading volume stands at $7.8 million in the past 24 hours. Its trading volume went down by 15% from the previous day, signaling a decrease in market activity.

ACE was first listed on Bithumb in August 2024 at a starting price of around 3,722 won ($2.53).